Ontario's Fair Housing Plan aimed at cooling housing market in Ontario
April 20th, 2017 | Toronto | Professional Real Estate Investors Group (PREIG) Canada |
Ontario's Fair Housing Plan introduces a comprehensive package of measures to help more people find affordable homes, increase supply, protect buyers and renters and bring stability to the real estate market.
Ontario's housing market has seen very dynamic growth in recent years,
with prices in the Greater Toronto Area and the Greater Golden Horseshoe rising significantly. This has been supported by economic fundamentals, including a growing population, rising employment, higher incomes and very low borrowing costs.
House prices have been rising at a robust pace in the Greater Toronto Area since the end of the 2008-09 recessions.
After two consecutive years of double-digit gains, average house prices in the Toronto region reached $916,567 in March 2017, up 33.2% from a year earlier.
Ontario plans to help cool a hot housing market by bringing 16 proposed measures:
- A 15% non-resident speculation tax to be imposed on buyers in the Greater Golden Horseshoe area who are not citizens, permanent residents or Canadian corporations.Refugees and nominees under the Ontario Immigrant Nominee Program would not be subject to the NRST. Subject to eligibility requirements, a rebate would be available for those who subsequently attain citizenship or permanent resident status as a well as foreign nationals working in Ontario and international students.
- Expanded , including those built after 1991, which are currently excluded. The increase is capped at a maximum of 2.5 per cent. Updates to the Residential Tenancies Act to include a standard lease agreement, and technical changes to the Landlord-Tenant Board meant to make the process fairer, as well as other changes.
- A program to leverage the value ofassets across the province to develop a mix of market-price housing and Potential sites under consideration for a pilot project include the West Don Lands, 27 Grosvenor/26 Grenville Streets in Toronto, and other sites in the province. This builds on an agreement reached previously with the City of Toronto to ensure a minimum of 20% of residential units within the West Don Lands are available for affordable rental, with an additional 5% of units for affordable ownership.
- Legislation that would allow Toronto and possibly other municipalities to introduce a in an effort to encourage property owners to sell unoccupied units or rent them out.
- A plan to ensure is charged at a similar rate as other residential properties.
- A aimed at encouraging the construction of by rebating a portion of development charges.
- More flexibility for municipalities when it comes to using
- The with dedicated provincial employees to identify barriers to specific housing development projects and work with developers and municipalities to find solutions.
- An effort to understand and in the housing market. Paper flipping,(Wholesaling) a practice that includes entering into a contractual agreement to buy a residential unit and assigning it to another person prior to closing.
- A review of the ensure that consumers are fairly represented in real estate transactions.
- The launch of a which will meet quarterly to provide the government with ongoing advice about the state of the housing market and discuss the impact of the measures and any additional steps that are needed. The group will have a diverse range of expertise, including economists, academics, developers, community groups and the real estate sector.Professional real estate investors group (PREIG) Canada would like to be part of it.
- Education for consumers on their rights, particularly on the issue of one in a real estate transaction.
- A to explore more comprehensive reporting requirements so that correct federal and provincial taxes, including income and sales taxes, are paid on purchases and sales of real estate in Ontario.
- Set timelines for to be established in consultation with the sector and the Technical Standards & Safety Authority
- Provisions that would require municipalities to consider the appropriate to accommodate a diverse range of household sizes and incomes, among other things. As part of the implementation of the Growth Plan for the Greater Golden Horseshoe, 2006, enough land was set aside in municipal official plans to accommodate forecasted growth to at least 2031.
Actions to Date taken by province of Ontario
The Ontario government has taken a number of actions over recent months and years in order to support homebuyers, increase supply of affordable and rental housing and promote fairness. These include:
- Helping more people purchase their first home by doubling the maximum Land Transfer Tax refund for eligible first-time homebuyers to $4,000. This means eligible homebuyers in Ontario pay no Land Transfer Tax on the first $368,000 of the cost of their first home.
- Modernizing the Land Transfer Tax to reflect the current real estate market, including increasing rates on one or two single-family residence over $2 million. Revenue generated from the increased rates is being used to fund the enhancements to the First-Time Homebuyers Refund.
- Making it easier for not-for-profit affordable housing providers to buy surplus government lands.
- Introducing an inclusionary zoning framework for municipalities that will enable affordable housing units as part of residential developments.
- Amending the Planning Act and the Development Charges Act to support second units, allowing homeowners to create rental units in their primary residence and creating additional supply.
- Freezing the municipal property tax burden for multi-residential apartment buildings in communities where these taxes are high.
- Collecting information about Ontario's real estate market to support evidence-based policy development
We believe the information contained in this article to be accurate. It is presented with the understanding that we are not engaged in rendering legal, accounting, or investment advice. When professional assistance is required, utilize the services of a licensed real estate broker, lawyer, accountant, or other consultant as may be required.
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